Data Management in Tally

How to Process Payroll | Payroll Process in Easy Steps

Posted on by Tally Academy

The payroll process is an essential activity in an organization with employees. Depending on the structure of the salaries and the prevailing laws and regulations, the calculation of payroll can be either simple or more complex. It is vital to process payroll in a timely and accurate manner. Any discrepancies in the calculations have a direct impact on employee morale and productivity.

The payroll process also involves compliance with the regional laws and regulations. If there are mistakes that are not in compliance with the rules, it could put the organization into legal and financial trouble. An accurate and effective payroll process is essential in any organization whether big or small. Using business management software with capabilities to manage payroll makes the entire process simpler and error-free.

The payroll is the amount of money that the employer pays out to employees for their services. Every organization has a list of add ons and deductions from the basic pay of the employee. These involve allowances, bonuses, taxes etc.What is payroll process?

To have a payroll process, every organization must:

  • Define a pay policy with basic pay, benefits, leave policies, encashment of leave and other related items
  • Define the components that appear on the payslip as per the company’s policy and in compliance with regulations
  • Obtain and record the employee details accurately. This includes the bank account details, tax details etc.
  • Validate the employee inputs
  • Calculate the statutory as well as non-statutory deductions and deduct them to arrive at the gross pay amount
  • Pay the salary amount to the employees through the mode that the company employs. Most often this is done by intimating the bank of the salary amount to be disbursed to each employee account
  • Record the payroll transactions in the accounting system
  • Pay the dues to the appropriate authorities and file returns accurately and before the due dates
  • Physically or digitally (PDF) distribute payslips and other relevant tax documents to the employees.

How to process payroll in easy steps?

The payroll process steps are categorized into the following

  • Pre-payroll process,
  • Payroll calculation process
  • Post-payroll process

Let’s discuss each of these in detail.

Pre-Payroll Process

Defining the payroll policy

Different organizations have their own unique payroll policies. These should be very clearly and unambiguously defined. The first step is to define the basic pay for the different designations in the organization. Leaves and benefits are monetized differently in each organization. There may be deductions for leave taken beyond the given quota. Unused leave may be convertible to money. Some organizations pay for overtime while others do not. Certain companies have the practice of an annual bonus payout. If the bonus is performance-based, the policy should be well defined. The accurate computation of this amount is essential. The payroll policy should be approved by the management of the organization.

Data gathering

The details of an employee are usually collected and recorded at the time of onboarding a new employee. This may include their PAN number, other ID numbers and details.

Attendance and performance data

Payroll also requires the attendance data of the employee. If any bonuses or benefits are due, the relevant department would have to provide the data to payroll. If the employee has earned a performance bonus or a raise, it should be recorded by payroll. In a smaller organization, this data would be easy to gather and compute. In a larger organization, this flow of data to payroll is more challenging. Business management software with an integrated payroll system makes the data flow easier and more accurate.

 Validation

All the data received would have to be validated for accuracy and compliance with the organization’s policies as well as the law. Payroll would have to ensure that no employee who has left employment continues to feature as an active employee for payroll calculation. All the current employees should be included for salary calculation without missing anyone.

Payroll calculation process

This is the payroll process that takes place based on the data input.Payroll is calculated manually or through the use of software to calculate the net pay after factoring in gross income and gross deductions.

Gross income/salary = regular income + allowances if any + one time payment or bonus if any

Gross deduction = regular deductions + statutory deductions + one-time deductions if any

Net pay = Gross income – gross deduction

If the payroll is calculated manually, these values are checked for accuracy and errors if any are corrected.

Post-payroll process

Payroll accounting

The amount of salary disbursed as well as the different components of additions and deductions have to be accounted for. The relevant transactions have to be recorded and entered as per the accounting practices of the organization. If the company uses a standalone payroll software or HR software the data would have to be reentered into the accounting software.

Salary payout

The actual payment of salary to the employees is most often through bank accounts. The organization’s bank account should be sufficiently funded before initiating the salary disbursal payroll process. A salary bank advice statement is generated based on the net pay for each employee along with their account number.

Autogenerated Payroll Voucher in TallyPrime

Reporting

Payslips and tax details are generated and given to the employees physically or digitally. Payroll reports that are required by the management have to be generated and submitted.

Compliance

The statutory deductions that are made from the employees’ salaries have to be paid to the relevant government agencies. The amounts have to be paid and the returns filed well within the due dates.

Process payroll accurately and on time every time

When there are gaps in the payroll data flow, the chance of computational or data entry errors is higher. It is essential that payroll should be error-free and in compliance with the laws and regulations. TallyPrime makes the payroll process quick and easy.

auto-generated-payroll-processing

The benefits of payroll accounting with TallyPrime are:

  • Integration with financial accounting. Tally seamlessly integrates the payroll amounts to the accounting process. There is no necessity for reentering all the payroll data into the accounting software
  • Generates payslips for employees
  • Enables payroll processing with compliance
  • Also tracks the loan details of employees
  • Allows flexibility in user-defined classifications, departments, groups, subgroups and other criteria. It also allows the user to define all the components of payroll such as attendance/time/production units, earning and deduction pay heads.

Generate e-Way bill Instantly Using TallyPrime

Posted on by Tally Academy

Electronic waybill, popularly known as an e-Way bill is a document that needs to be generated for consignment involving the movement of goods beyond the notified value. Most states have a threshold value of 50,000 and a higher threshold value in a few states.

e-Way bill is not a new concept. It has been in place for a few years now and in fact, even before GST with different names. We all know it is a process that requires the supplier/transporter to generate an e-way bill from the portal before transporting or shipping the goods. Once the e-way bill is generated, a unique number is generated for a specific consignment along with an e-way bill document and the supplier can choose to capture it on the invoice.

Today, most businesses generate e-way bills by mentioning the invoice details on the portal either using offline tools (JSON) or direct entry on the portal. While it is a mandatory need, but the effort and time that goes into generating the e-way bills, make the entire process of invoicing to shipping a cumbersome one. Guess, this is a common difficulty that you must have already felt irrespective of how big or small is your business.

To alleviate the difficulty in the current way of generating the e-way bill and to make the entire process simple and seamless, the latest release of TallyPrime comes with an inbuilt connected e-way bill solution that generates e-way bill instantly.

Yes, you read it right! You just need to record an invoice and the e-way bill be generated automatically.

Using TallyPrime’s online connected e-way bill solution, you can instantly generate e-way bills. All you need to do is just record an invoice in your usual way, and TallyPrime will automatically generate an e-way bill and capture the e-way bill number on the invoice.

instant-e-way-bill-in-tallyprime

Tally being one of the recognised ISO certified GSP (GST Suvidha Provider), TallyPrime directly integrates with the e-way portal to seamlessly generate e-way bills for you. It is so simple that you will certainly feel that generating an e-way bill is just the same as invoicing.

Online connected e-way bill features in TallyPrime

Tally’s fully connected e-way bill solution is simple, seamless with zero manual work. Take a look at some of the key features of a connected e-way bill solution.

Generate e-way bill instantly.

Given the compliance need of e-way bills in the process of invoicing and shipment, you no longer need to look at invoicing and e-way bill generation separately. Using TallyPrime, you seamlessly generate an e-way bill online by just recording the invoice. TallyPrime’s full connected solution absorbs the complexity by directly sending the details in prescribed format to the portal and fetches e-way bill details automatically.

e-way bill generated in TallyPrime

Cancel, Extend and update e-way bill online

In some situations, the invoices for which e-way bill is already generated requires to be cancelled. It could be for various reasons such as data entry mistake/order cancelled etc. Also, in an exceptional circumstance like natural calamity, trans-shipment delay, accident, break-down etc. you may want to extend the validity of the e-way bill. No matter what situations you encounter, using TallyPrime, you can cancel, extend ad update e-way bills online without the need to manually perform these actions from the portal.

cancel and extend e-way bill in TallyPrime

Also, for some reason, if you have generated an e-way bill either manually or using any of the available modes (outside TallyPrime), you can auto-fetch such details and capture the e-way bill number on the invoice. Thus, keeping your books up to date.

Flexibility to generate EWB online along with e-Invoice or separately.

By design, the e-invoice system (IRP) integrates with GSTN and e-way bill system. As a result, one can generate an e-invoice along with e-way bill as well. Using TallyPrime’s connected e-way bill solution, you get even more flexibility to do so. You can choose to generate an e-way bill along with an e-invoice or can separately generate only e-way bill as it suits your need.

e-invoice and e-way bill in tallyPrime

Flexibility to generate e-way bill for a single invoice or in bulk from a report

TallyPrime’s connected e-way bill solution comes with the flexibility to generate e-way bill for a single invoice or in bulk. You can generate an e-way bill for a single invoice in the flow of recording the transaction or you can choose to generate e-way bills in bulk (for more than one invoice) from the report. Generating e-way bills, be it a single invoice or bulk is amazingly simpler and faster.

bulk e-way bill in TallyPrime

Enhanced e-way bill reports

TallyPrime’s connected e-way bill solution comes with exclusive reports for e-way bill giving you a complete view of the e-way bill transactions and their status. With the help of the report, you will stay on top of the e-way bill status (Pending/cancelled/generated) and perform various other actions such as cancel, extend, etc. as per your needs.

Supports other modes for e-way bill generation.

In case of exigency cases like unavailability of internet services on a system or due to any other reason, if you wish to use other modes of e-way bill generation such as using offline utility, a direct entry on the portal etc. TallyPrime fully supports these situations.  Not only it supports these circumstances, but also auto-fetches details and updates the e-way bill number on the invoice. Thus, keeping your books up to date.

Offline-mode-e-way-bill

What’s more? The online connected e-way bill solution of TallyPrime comes with an inbuilt alert system to prevent redundancy and ensure that the latest data is shared with the portal, especially in a multi-user environment. Furthermore, the renowned and trusted ‘Prevention, Detection and correction’ capability ensure that the transactions are validated and only the correct and complete details are sent for e-way generation. This way you can prevent errors and work error-free.

Accounting and Payroll Software

Posted on by Tally Academy

Introduction

Businesses today have plenty of obstacles to overcome and plenty of tools to help them do so. Technology in particular has greatly changed the way companies operate, and currently over ninety percent of all companies use technology of some form to help with basic functions. Payroll is the most commonly used feature in software.

Companies that don’t like the thought of outsourcing will have to find another solution, and TallyPrime’s payroll is an attractive option. There are many benefits of using TallyPrime payroll solutions or HR payroll software, including some which one may not even be aware of. If the business wants to keep the HR department responsible for payroll, considering TallyPrime payroll is a great way to help them handle the tasks.

Benefits from a payroll software for accountants

  • Simplicity in usage
  • Accounting and payroll software do not involve installation of any expensive infrastructure equipment for its functioning
  • Implementation of accounting and payroll software is as simple as logging into a secure web portal
  • No disruption of work at the office while systems are set up and no downtime with accounting and payroll software
  • It is simple in a way that its features can be accessed and learned by any professional with the most basic computer software and business skills
  • Ensures security and reliability of data
  • Accessibility – Data can be accessed from any machine (computer) at any time

What does a business need from an HR payroll software?

If a business is considering using an automated program and keeping most of the payroll functions within the office, then it should likely ensure that payroll customer service can help it deal with any issues related to the software, especially technical support.

Most HR payroll software will provide with regular reports, but good payroll customer service means being able to request any payroll related information and receive it quickly. Say, if a business needs the stats for employee salaries or attendance over the last six months, it should be able to get it through payroll customer service.

Payroll software for small business

Technically speaking, payroll software is defined as a computer program that manages a company’s payroll necessities. For small and medium businesses, we know it’s a formidable task to sit at the end of every month and pour in many hours to summing up the salary details for each employee. Often, in such companies, the owner has to perform multiple duties and it’s difficult to spare time for calculating overtimes and employees’ taxes.

And one such HR payroll software which tops the Payroll software list among other service providers for small business entities is TallyPrime. TallyPrime Accounting and payroll software is simple yet effective software that takes care of all the necessary calculations and takes care that the salaries are paid on time.

TallyPrime delivers comprehensive payroll management software with necessary payroll compliances built in it. It provides the facility from simple payslip generation up to complex allied processes which include Salary revision, loans and advances and ad-hoc payments. It also manages the salary of the employees according to statutory norms and processes.

Notable features of TallyPrime payroll software

  • Full integration with accounts for simplified payroll processing and accounting
  • User-defined classifications and sub-classifications for comprehensive reporting on aspects such as employees, employee groups, pay components, or departments
  • Support for user-defined Earnings and Deductions Pay Heads
  • Flexible and user-defined criteria for simple or complex calculations
  • Unlimited grouping of Payroll Masters
  • Support for user-defined production units such as attendance, production, or time-based remuneration units
  • Flexible processing period for payroll
  • Comprehensive reports for cost centre as well as employee-wise costing
  • Predefined processes for accurate and timely salary processing, employee statutory deductions & employer statutory contributions
  • Processing payments using the e-payments capability in TallyPrime
  • Auto-fill facility to expedite the attendance, payroll, and employer’s contribution processes
  • Accurate computation and deduction of statutory payments such as Income Tax, ESI, EPF, NPS, Professional Tax, and Gratuity
  • Generate statutory forms and challans for Income Tax and EPF & ESI, as prescribed
  • Facility to drill-down to the voucher level for any alteration
  • Compute arrears of previous period(s)
  • Track loan details of employees.

Frequently asked questions

What is payroll management?

Payroll is simply an aggregation of total amount of wages paid by the company to its employees. Companies usually hire payroll services from third parties by way of outsourcing which make the process of accounting for payroll and easy and effortless task. Management of employee payroll in a smart way is now as easy as it can get, with TallyPrime. A collection of predefined processes in TallyPrime enables error-free automation of payroll process. Further, you can view and handle exceptions effortlessly.

 

How to choose the best payroll management software?

To choose the best payroll management software, you must ensure that it has the following capabilities:

  • Payroll Accounting & Salary Processing
  • Multiple Employee Grouping
  • Flexible Attendance/Production Types
  • Statutory Compliance in payroll
  • Easy to define and process fixed and flexible pay-outs to the employees
  • Multiple Calendar type such as fixed days, as per calendar etc. to suit your requirements
  • Generate Monthly Returns, Annual Forms and Statements for PF, ESI, Professional Tax and Income Tax.

 

How does payroll management software work?

TallyPrime offers various features that allows you to implement and process payroll. You can use the Payroll Info. menu to create different payroll masters required for computing earnings and deductions for employees.

 

What is payroll in TallyPrime?

The payroll feature in TallyPrime is fully integrated with accounting to streamline payroll processing. Organisations can set up and process payroll using simple and complex criteria. A collection of predefined processes in TallyPrime enable error-free automation of payroll process.

 

How do I enter salary in Tally payroll software?

You can add, delete or change a pay head component or its value for individual employees. To quickly enter the pay structure of each employee, define the Pay Structure for the Employee Group for an employee group using pay heads which are applicable to most employees. You can then copy and apply the same structure to each employee.

Fundamentals of Accounting | Accounting Basics

Posted on by Tally Academy

What is accounting?

To understand the fundamentals of accounting, you must comprehend the definition of accounting.

Accounting is consolidating the financial transactions of a company using a systematic approach. It involves recording, analyzing, reporting, and retrieving financial transactions when required. Accounting is mandatory for legal reasons, taxes, and to understand business health. Accounting ensures that every business transaction is accounted for and if you need to pull out information about any expense you can do so with ease.  Accounting can be divided into two parts; financial accounting and management accounting.

Financial accounting deals with the proper presentation of the transactions in the form of financial statements such as income statements which are shared with people outside the business. Management accounting is a form of accounting whereby the management department receives financial information so they can take vital business decisions to ensure efficient business continuity. Management accounting is part of the internal process as it is used for improving the overall business. It includes information such as the budget.

Key objectives of accounting

The three key objectives of accounting are as follows.

  • Record keeping

The fundamentals of accounting include record keeping which is the primary function of accounting. A business must use standard forms of storing and retaining information so it can be retrieved when the need for it arises. Thorough and accurate storage of records is essential for all transaction-related purposes. A software package such as TallyPrime can be utilized to store every transaction that takes place.

  • Reporting

Financial reporting is a key accounting objective after record keeping. Accounting enables businesses to record and report their financial status at the end of a particular period. It involves putting together transaction details and reports that are necessary to make sense of a certain aspect of a business during a specific time period. Financial statements are results of aggregating financial information of a business and these are useful tools for reporting the financial parts of a business.

  • Analysis

The reports which are based on the business records are analyzed in accounting. When business health needs to be determined then the business reports are analyzed. Analysis in accounting enables accountants to find out ways to improve business efficiency, upgrade processes, and to see where unnecessary expenses are being made. Analysis of financial reporting allows your business to run without problems as it ensures no discrepancies are found.

TallyPrime

Accounting solutions to help you manage your business just the way you want.

Accounting process and steps

The accounting process is one of the fundamentals of accounting. Also known as an accounting cycle, it follows a transaction from the moment it was recorded to when a report is made using various transactions that occurred in a particular period of time. Businesses can use single-entry accounting or double-entry accounting. Firms use accounting software packages such as TallyPrime to automate the accounting process. The benefits include saving time, effort, and money for storage, analysis, and retrieval purposes. Companies can fully automate their accounting or they can leave some aspects to be manually handled.

Steps of the accounting process

There are 8 steps in the accounting process. This is a framework and it can vary from company to company as each company has an individual model that it works with.

  • Step 1: Transaction identification

You need to identify your business transactions first. Every unique transaction needs to be recorded so that it is reflected correctly. All expenses such as costs to acquire, repair, and upgrade need to be accounted for. Additionally, every sale record must be stored so it all sales transactions are in one place.

  • Step 2: Journal creation

This step involves recording each transaction in a journal. You can choose between two types of accounting; cash accounting and accrual accounting. The difference is when the transactions are recorded and stored. Cash accounting is recorded the moment the cash is paid or received. Accrual accounting is when transactions are recorded as they occur.

  • Step 3: General ledger posting

After the entry in the journal, the transaction details need to be reflected in the general ledger. The general ledger allows the categorization of transactions because they are saved according to different accounts. That is, transactions of the same account are recorded in one place and so on. This allows easy monitoring according to particular accounts.

  • Step 4: Trial balance

In this step, the trial balance is calculated. Ideally, the debits must be equal to credits for every account. The trial balance throws light on the balances which have not been adjusted yet in every account. When an unadjusted trial balance is found, it is analyzed in the next step of the accounting cycle

  • Step 5: Worksheet analysis

Adjustment of the various transaction entries is done in this step of the accounting process. First, you need to create a worksheet and make sure that the credits and debits are equal to each other. In the case of accrual accounting, there is an additional step here which is to adjust the entries for revenue and expense matching purposes.

  • Step 6: Journal entries adjustment

This is the stage in the accounting cycle where adjustments need to be made. Once the adjustments have been done, the trial balance is prepared again to ensure that the debits are equal to the credits. Only then can you move on to the next step.

  • Step 7: Financial statements

This step involves the financial statements that are generated after all the entries have been adjusted in the journal. In the majority of the cases, the major financial statements will include the cash flow statement, income statement, and balance sheet. These uncover the truth behind how the business is doing financially and how much profits it is earning.

  • Step 8: Closing

The last step of the accounting cycle is when the books are closed. This holds for the temporary accounts as they are shifted to permanent accounts. For example, the profit and loss statement is transferred to the retained earnings accounts and so on. The closing occurs at the end of the reporting period. After this, the cycle starts again.

Key accounting reports

The critical accounting reports are as follows.

  • Balance sheet

The balance sheet contains information about the total liabilities, assets, and stockholder equity. It gives information about the company’s resources and how these sources are being financed. A balance sheet can help you make better business decisions.

  • Profit and loss statement

The profit and loss statement is also known as P&L and income statement. It shows the revenues and expenses of a business over a period of time. A business is going in the right direction when the profits exceed its losses.

  • Statement of cash flows

This report summarizes the cash that is received or paid. It doesn’t reflect the non-cash transactions that take place such as purchases made on the basis of credit. It contains three parts; investing, operating, and financing. It gives information about cash generation.

How accounting software helps businesses

An accounting software tool can take the complexity out of accounting. Whether the business is small, growing, or enterprise-level, every business needs an accounting software package. TallyPrime is the best example of accounting software that handles everything. All you need to do is record the bills and invoices. TallyPrime will automate the rest. It minimizes human errors, automates management of books of accounts, generates informative customized reports and financial statements, and makes tax returns easy. Additionally, it improves inventory management, ensures tax compliance, streamlines business processes, aids in business forecasting, and accurately generates financial statements. This ensures you know how your business is doing at every step of the way.

Some of the key features of TallyPrime:

  • Record and bookkeeping
  • Invoicing and billing
  • Pre-defined chart of accounts
  • Accounts receivable and payable management
  • Wide range of accounting and financial reports
  • Multi-currency support
  • Sales and Purchase Management
  • Online business reports
  • Inventory Management
  • Taxation support

Payment Declaration Form – GST PMT – 08: Definition, Format and Rules

Posted on by Tally Academy

What is Form GST PMT-08?

The Form PMT-08 is used to make payment of self-assessed tax by all quarterly taxpayers under the new GST returns system. This form shall be used in the first two months of the quarter. It is used for declaring and paying the tax liability and claiming the eligible input tax credit. It is to be used by 20th of the next month (for the first two months of the quarter). It will be followed by the filing of RET-1/2/3 by the 25th of the month following the quarter.

Since the taxpayer pays the monthly tax liability through this form, such a form is a replacement for the current form GSTR – 3B. Thus, GST PMT – 08 is used to declare and pay the tax liability and claim eligible input tax credit. Furthermore, the taxpayer must make the payment of self-assessed liabilities through GST PMT – 08 by the 20th of the month succeeding the month for which tax is to be paid. Once the payment is made, the taxpayer needs to file GST RET – 1, GST – RET 2 or GST RET – 3 by the 25th of the month following the quarter to which such a return pertains.

Format of GST PMT-08

Form GST PMT-08 Format

Key things to keep in mind while filing GST PMT-08

  • PMT-08 form applies to all returns i.e., SAHAJ, SUGAM, and Normal returns (quarterly filing only)
  • A taxpayer who opts to do return filing on a quarterly basis needs to make a payment on a monthly basis depending on the supplies initiated within the month
  • With the help of this form, only eligible ITC can be claimed
  • Self-assessed liabilities will be paid for the initial two months of the quarter for quarterly filers and these amounts shall be populated to RET-1
  • The credit of the tax paid within the initial two months of the quarter will be available at the time of return filing for the quarter
  • Self-assessed liabilities will be paid within the 20th of every month
    Liability can either be settled out of the balance in the electronic cash ledger or electronic credit ledger, whichever is applicable
  • Tax liability and input tax credit (ITC) availed will be based on self-assessment subject to the adjustment made in the main return of the quarter
  • According to Section 50 of the Act, excess ITC claimed/short liability declared will be liable for interest charges. Hence, any late payment will draw interest as per the rate mentioned in Section 50 of the Act
  • Also, the declaration in this form needs to be filed even if no supplies were initiated during the month

What is Form GST Anx-2 under New GST Return?

Posted on by Tally Academy

Under the New GST Return System, there will be one main return called the FORM GST RET-1 and two annexures i.e. FORM GST ANX-1 and FORM GST ANX-2. The return will have to be filed on a monthly basis, except for small taxpayers (taxpayers with a turnover up to Rs 5 crore) who can opt for the quarterly filing of returns.

What is FORM GST ANX-2?

FORM GST ANX-2 is an annexure to the main return FORM GST RET-1, and will have all the details of inward supplies, for the recipient of supplies to take action by either accepting or rejecting these documents, or marking them as pending, for action to be taken later. If the recipient accepts these documents, it means that the supplies reported in such documents by the suppliers in FORM GST ANX-1 are correct.

What are the contents of FORM GST ANX-2?

GSTIN: A taxpayer needs to input the GSTIN.

Basis details: Basic details such as trade name, legal name, etc. will be auto-populated on the basis of the GSTIN.

Inward supplies received from a registered person (other than the supplies attracting reverse charge), imports and supplies received from SEZ units / developers on Bill of Entry: The details will be entered as follows-

 

Table No. Name of the Table Instructions
3A Supplies received from registered persons including services received from SEZ units The details in these tables will be auto-populated from the following tables of the supplier’s FORM GST ANX-1 return:

3B – Supplies made to registered persons

3E –  Supplies to SEZ units/developers with payment of tax

3F – Supplies to SEZ units/developers without payment of tax

3G – Deemed exports

The recipient has the option to take action on the documents by either accepting, rejecting or marking them as pending.
3B Import of goods from SEZ units/developers on Bill of Entry
3C Import of goods from overseas on Bill of Entry
4 Summary of the input tax credit This will be the total figure of input tax credit for the return filing period, based on action taken by the recipient of supplies such as:

Total credit on all documents that have been rejected

Total credit on all documents that are kept pending

Total credit on all documents that have been accepted
5 ISD credits received This table is for reporting eligible input tax credit that has been received from an input service distributor. This needs to be entered document-wise.

What is the format of FORM GST ANX-2?

FORM GST ANX-2 Format

Key things for taxpayers to keep in mind while filing GST ANX-2

  • The supplier can upload documents continuously and on a real-time basis in FORM GST ANX-1 and will be auto-populated in this annexure i.e. FORM GST ANX-2
  • The details of the documents uploaded by the supplier shall be available for the recipient in FORM GST ANX-2 to take action such as to accept, reject or to keep the document pending
  • If a document is accepted by a recipient, it means that the document has been received before the recipient has filed his return and that the details reported by the supplier are correct
  • Any corrections in the rejected documents can be made only by the supplier through his FORM GST ANX-1
  • If a recipient marks a document as pending, this means he has deferred his action on the said document for a later date, of either accepting or rejecting the document. Input tax credit on these documents will not reflect in the main return i.e. FORM GST RET-1
  • The supplier cannot amend pending invoices until they are rejected by the recipient
  • The status of whether the supplier’s return is filed or not will be made known to the recipient in his FORM GST ANX-2. However, this does not affect the eligibility of the input tax credit available to the recipient, which will be decided as per the Act along with the rules made thereunder
  • A separate functionality will be available to search for and reject an accepted document, on which credit has already been availed. This credit will be shown under reversal in table 4B(1) of FORM GST RET-1, which can be adjusted in table 4A(11) of the same return, in order to arrive at the amount of input tax credit that has been availed
  • FORM GST ANX-2 will be deemed filed based upon the filing of the main return i.e. FORM GST RET-1 relating to the particular tax period
  • If documents have been uploaded by a supplier in his FORM GST ANX-1, but he has not filed his return for the previous two consecutive periods, then the recipient will not be able to take credit on these documents even if the same is made available to him in his FORM GST ANX-2. However, the option will be available to reject or keep these documents pending. For suppliers who file their returns quarterly instead of monthly, then the term ‘two consecutive periods’ are replaced by ‘one quarter’

GST Exempted Goods: List of Goods Exempt Under GST

Posted on by Tally Academy

Under different taxation systems, a host of goods or services is exempt from tax owing to socio-economic reasons. For instance, under the service tax regime, clinical and education services were exempt from service tax. Similarly, the sale of life-saving drugs or books meant for reading in different state governments were exempt from taxes.

Like all such taxes, there are few exceptions even under GST where goods or services are exempt from tax liability. Such exemptions on specified goods or services are granted by the government based on certain conditions. Hence, while determining the tax liability under GST, one needs to check for not only the goods or services that are chargeable to GST. But, one also needs to look into the goods or services that are exempt from tax.

Thus, the taxpayers need to understand not only the provisions regarding exemptions but also their implications to avoid any wrong application. So, before jumping to the list of non-gst goods, let’s first define what is an exempt supply under GST?

What is an Exempt Supply under GST?

As per section 2(47) of CGST Act 2017, an exempt supply means any goods or services or both:

  • which attract nil rate of tax or
  • that may be wholly exempt from tax under section 11 or
  • may be wholly exempt from tax under section 6 of IGST act or
  • including non-taxable supply

Thus, exempt supply includes the supply of following types of goods or services:

  • supply attracting nil rate of tax
  • supplies wholly exempt from tax
  • non – taxable supplies

GST Exempted Goods: List of Goods Exempt Under GST

Live Animals

  • Live asses, mules and hinnies (HSN Code – 0101)
  • Bovine animals (Live) (HSN Code – 0102)
  • Live swine (HSN Code – 0103)
  • Sheep and goats (Live) (HSN Code – 0104)
  • Live poultry, that is to say, fowls of the species Gallus domesticus, ducks, geese, turkeys and guinea fowls (HSN Code – 0105)
  • Other live animal such as Mammals, Birds, Insects (HSN Code – 0106)

Meat

  • Meat of bovine animals, fresh and chilled (HSN Code – 0201)
  • Bovine animals’ meat or frozen meat (other than frozen and put up in unit container) (HSN Code – 0202)
  • Meat of swine, fresh, chilled or frozen (other than frozen and put up in unit container) (HSN Code – 0203)
  • Sheep or goats’ meat, fresh meat, chilled meat or frozen meat (other than frozen and put up in unit container) (HSN Code – 0204)
  • Meat of horses, asses, mules or hinnies, fresh, chilled or frozen (other than frozen and put up in unit container) (HSN Code – 0205)
  • Edible offal of bovine animals, swine, sheep, goats, horses, asses, mules or hinnies, fresh, chilled or frozen (other than frozen and put up in unit container) (HSN Code – 0206)
  • Meat and edible offal, of the poultry of heading 0105, fresh, chilled or frozen (other than frozen and put up in unit container) (HSN Code – 0207)
  • Other meat and edible meat offal, fresh, chilled or frozen (other than frozen and put up in unit container) (HSN Code – 0208)
  • Pig fat, free of lean meat, and poultry fat, not rendered or otherwise extracted, fresh, chilled or frozen (other than frozen and put up in unit container) (HSN Code – 0209)
  • Poultry fat, free of lean meat, and pig fat, not rendered or otherwise extracted, salted, in brine, dried or smoked (other than put up in unit containers) (HSN Code – 0209)
  • Meat and edible meat offal, salted, in brine, dried or smoked; edible flours and meals of meat or meat offal, other than put up in unit containers (HSN Code – 0210)

Fish, Meat and Fillets

  • Fish seeds, prawn / shrimp seeds whether or not processed, cured or in frozen state (other than goods falling under Chapter 3 and attracting 5%) (HSN Code – 3)
  • Fish, fresh or chilled, excluding fish fillets and other fish meat of heading 0304 (HSN Code – 0302)
  • Live fish (HSN Code – 0301)
  • Fish fillets and other fish meat (whether or not minced), fresh or chilled (HSN Code – 0304)
  • Crustaceans, whether in shell or not, live, fresh or chilled; crustaceans, in shell, cooked by steaming or by boiling in water live, fresh or chilled (HSN Code – 0306)
  • Molluscs, whether in shell or not, live, fresh, chilled; aquatic invertebrates other than crustaceans and molluscs, live, fresh or chilled (HSN Code – 0307)
  • Aquatic invertebrates other than crustaceans and molluscs, live, fresh or chilled (0308)

Eggs, Honey and Milk Products

  • Natural honey, other than put up in unit container and bearing a registered brand name (HSN Code – 0409)
  • Fresh milk and pasteurized milk, including separated milk, milk and cream, not concentrated nor containing added sugar or other sweetening matter, excluding Ultra High Temperature (UHT) milk (HSN Code – 0401)
    Curd; Lassi; Buttermilk (HSN Code – 0403)
  • Chena or paneer, other than put up in unit containers and bearing a registered brand name (HSN Code – 0406)
  • Birds’ eggs, in shell, fresh, preserved or cooked (HSN Code – 0407)

Non – Edible Animal Products

  • Human hair, unworked, whether or not washed or scoured; waste of human hair (HSN Code – 0501)
  • All goods i.e. Bones and horn-cores, unworked, defatted, simply prepared (but not cut to shape), treated with acid or gelatinized; powder and waste of these products (HSN Code – 0506)
  • Semen including frozen semen (HSN Code – 0511)
  • All goods i.e. Hoof meal; horn meal; hooves, claws, nails and beaks; antlers; etc. (HSN Code – 050790)

Live Trees and Plants

  • Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage (HSN Code – 6)

Vegetables

  • Tomatoes, fresh or chilled (HSN Code – 0702)
  • Cucumbers and gherkins, fresh or chilled (HSN Code – 0707)
  • Potatoes, fresh or chilled (HSN Code – 0701)
  • Onions, shallots, garlic, leeks and other alliaceous vegetables, fresh or chilled (HSN Code – 0703)
  • Cabbages, cauliflowers, kohlrabi, kale and similar edible brassicas, fresh or chilled (HSN Code – 0704)
  • Lettuce (Lactuca sativa) and chicory (Cichorium spp.), fresh or chilled (HSN Code – 0705)
  • Carrots, turnips, salad beetroot, salsify, celeriac, radishes and similar edible roots, fresh or chilled (HSN Code – 0706)
  • Other vegetables, fresh or chilled (HSN Code – 0709)
  • Dried vegetables, whole, cut, sliced, broken or in powder, but not further prepared (HSN Code – 0712)
  • Manioc, arrowroot, salep, Jerusalem artichokes, sweet potatoes and similar roots and tubers with high starch or inulin content, frozen or dried, whether or not sliced or in the form of pellets (inserted w.e.f 14/11/2017 : and put up in unit container and –
    (a) bearing a registered brand name; or
    (b) displaying a brand name on which an actionable claim or enforceable right in a court of law is available [other than those where any actionable claim or enforceable right in respect of such brand name has been foregone voluntarily] (HSN Code – 0714)
  • Dried leguminous vegetables, shelled, whether or not skinned or split (HSN Code – 0713)
  • Manioc, arrowroot, salep, Jerusalem, artichokes, sweet potatoes and similar roots and tubers with high starch or inulin content, fresh or chilled; sago pith (HSN Code – 0714)

Fruits and Dry Fruits

  • Coconuts, fresh or dried, whether or not shelled or peeled (HSN Code – 0801)
  • Brazil nuts, fresh, whether or not shelled or peeled (HSN Code – 0801)
  • Other nuts, Other nuts, fresh such as Almonds, Hazelnuts or filberts (Coryius spp.), walnuts, Chestnuts (Castanea spp.), Pistachios, Macadamia nuts, Kola nuts (Cola spp.), Areca nuts, fresh, whether or not shelled or peeled (HSN Code – 0802)
  • Bananas, including plantains, fresh or dried (HSN Code – 0803)
  • Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh (HSN Code – 0804)
  • Citrus fruit, such as Oranges, Mandarins (including tangerines and satsumas); clementines, wilkings and similar citrus hybrids, Grapefruit, including pomelos, Lemons (Citrus limon, Citrus limonum) and limes (Citrus aurantifolia, Citrus latifolia), fresh (HSN Code – 0805)
  • Grapes, fresh (HSN Code – 0806)
  • Melons (including watermelons) and papaws (papayas), fresh (HSN Code – 0807)
  • Apples, pears and quinces, fresh (HSN Code – 0808)
  • Apricots, cherries, peaches (including nectarines), plums and sloes, fresh (HSN Code – 0809)
  • Other fruit such as strawberries, raspberries, blackberries, mulberries and loganberries, black, white or red currants and gooseberries, cranberries, bilberries and other fruits of the genus vaccinium, Kiwi fruit, Durians, Persimmons, Pomegranates, Tamarind, Sapota (chico), Custard-apple (ata), Bore, Lichi, fresh (HSN Code – 0810)
  • Peel of citrus fruit or melons (including watermelons), fresh (HSN Code – 0814)

Tea, Coffee and Spices

  • Coffee beans, not roasted (HSN Code – 0901)
  • Unprocessed green leaves of tea (HSN Code – 0902)
  • Seeds of anise, badian, fennel, coriander, cumin or caraway; juniper berries [of seed quality] (HSN Code – 0909)
  • Fresh turmeric, other than in processed form (HSN Code – 09103010)
  • Ginger (Fresh), other than in processed form (HSN Code – 09101110)
  • All goods of seed quality (HSN Code – 09)

Edible Grains

  • Wheat and meslin (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1001)
  • Rye (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1002)
  • Barley (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1003)
  • Oats (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1004)
  • Maize (corn) (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1005)
  • Rice (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1006)
  • Grain sorghum (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1007)
  • Buckwheat, millet and canary seed; other cereals such as Jawar, Bajra, Ragi (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1008)

Milling Industry Products

  • Wheat or meslin flour (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1101)
  • Cereal flours other than of wheat or meslin, (maize (corn) flour, Rye flour, etc.) (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1102)
  • Guar meal (HSN Code – 11061010)
  • Cereal groats, meal and pellets (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1103)
  • Flour, of potatoes (other than those put up in unit container and bearing a registered brand name deleted w.e.f 10/11/2017) (HSN Code – 1105
  • Cereal grains hulled (HSN Code – 1104)
  • Flour, of the dried leguminous vegetables of heading 0713 (pulses) (other than guar meal 1106 10 10 and guar gum refined split 1106 10 90), of sago or of roots or tubers of heading 0714 or of the products of Chapter 8 i.e. of tamarind, of singoda, mango flour, etc. (other than those put up in unit container and bearing a registered brand name) (HSN Code – 1106)

Oil Seeds, Fruit and Part of Plants

  • All goods of seed quality (HSN Code – 12)
  • Soya beans, whether or not broken, of seed quality (HSN Code – 1201)
  • Ground-nuts, not roasted or otherwise cooked, whether or not shelled or broken, of seed quality (HSN Code – 1202)
  • Linseed, whether or not broken, of seed quality (HSN Code – 1204)
  • Rape or colza seeds, whether or not broken, of seed quality (HSN Code – 1205)
  • Sunflower seeds, whether or not broken, of seed quality (HSN Code – 1206)
  • Other oil seeds and oleaginous fruits (i.e. Palm nuts and kernels, cotton seeds, Castor oil seeds, Sesamum seeds, Mustard seeds, Safflower (Carthamus tinctorius) seeds, Melon seeds, Poppy seeds, Ajams, Mango kernel, Niger seed, Kokam) whether or not broken, of seed quality (HSN Code – 1207)
  • Seeds, fruit and spores, of a kind used for sowing (HSN Code – 1209)
    Hop cones, fresh (HSN Code – 1210)
  • Plants and parts of plants (including seeds and fruits), of a kind used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purpose, fresh or chilled (HSN Code – 1211)
  • Locust beans, seaweeds and other algae, sugar beet and sugar cane, fresh or chilled (HSN Code – 1212)
  • Cereal straw and husks, unprepared, whether or not chopped, ground, pressed or in the form of pellets (HSN Code – 1213)
  • Swedes, mangolds, fodder roots, hay, lucerne (alfalfa), clover, sainfoin, forage kale, lupines, vetches and similar forage products, whether or not in the form of pellets (HSN Code – 1214)

Gums, Resins, Vegetable SAP & Extracts

  • Lac and Shellac (HSN Code – 1301)

Vegetable Materials and Products

  • Vegetable materials of a kind used primarily for plaiting (for example, bamboos, rattans, reeds, rushes, osier, raffia, cleaned, bleached or dyed cereal straw, and lime bark) (HSN Code – 1401)
  • Unworked coconut shell (HSN Code – 1404)
  • Betel leaves (HSN Code – 4049040)
  • Vegetable materials, for manufacture of jhadoo or broom sticks (HSN Code – 14049090)

Sugar, Jaggery, Honey & bubble Gums

  • Jaggery of all types including Cane Jaggery (gur) and Palmyra Jaggery (HSN Code – 1701 or 1702)

Pizza, Cake, Bread, Pasta & Waffles

  • Puffed rice, commonly known as Muri, flattened or beaten rice, commonly known as Chira, parched rice, commonly known as khoi, parched paddy or rice coated with sugar or gur, commonly known as Murki (HSN Code – 1904)
  • Pappad, by whatever name it is known, except when served for consumption (HSN Code – 1905)
  • Bread (branded or otherwise), except when served for consumption and pizza bread (HSN Code – 1905)

Tea & Coffee Extract & Essence

  • Prasadam supplied by religious places like temples, mosques, churches, gurudwaras, dargahs, etc. (HSN Code – 2106)

Water, Mineral & Aerated

  • Water (other than aerated, mineral, purified, distilled, medicinal, ionic, battery, de-mineralized and water sold in sealed container) (HSN Code – 2201)
  • Non-alcoholic Toddy, Neera including date and palm neera (HSN Code – 2201)
  • Tender coconut water other than put up in unit container and bearing a registered brand name (HSN Code – 2202 90 90)

Flours, Meals & Pellets

  • Aquatic feed including shrimp feed and prawn feed, poultry feed & cattle feed, including grass, hay & straw, supplement & husk of pulses, concentrates & additives, wheat bran & de-oiled cake (HSN Code – 2302, 2304, 2305, 2306, 2308, 2309)

Salts & Sands

  • Salt, all types (HSN Code – 2501)

Fossil Fuels – Coal and Petroleum

  • Electrical energy (HSN Code – 27160000)

Gases and Nonmetals

  • Dicalcium phosphate (DCP) of animal feed grade conforming to IS specification No.5470 : 2002 (HSN Code – 2835)

Drugs & Pharmaceuticals

  • Human Blood and its components (HSN Code – 3002)
  • All types of contraceptives (HSN Code – 3006)

Fertilizers

  • All goods and organic manure (other than put up in unit containers and bearing a registered brand name) (HSN Code – 3101)

Essential Oils, Beauty Products

  • Kajal (other than kajal pencil sticks), Kumkum, Bindi, Sindur, Alta (HSN Code – 3304)

Insecticides, Artificial Carbon & Graphite

  • Municipal waste, sewage sludge, clinical waste (HSN Code – 3825)

Polymers, Polyethylene, Cellulose

  • Plastic bangles (HSN Code – 3926)

Rubber, Plates, Belt, Condensed Milk

  • Condoms and contraceptives (HSN Code – 4014)

Fuel wood, Wood Charcoal

  • Firewood or fuel wood (HSN Code – 4401)
  • Wood charcoal (including shell or nut charcoal), whether or not agglomerated (HSN Code – 4402)

Newsprint, Uncoated paper & paperboard

  • Judicial, Non-judicial stamp papers, Court fee stamps when sold by the Government Treasuries or Vendors authorized by the Government (HSN Code – 4802)
  • Postal items, like envelope, Post card etc., sold by Government (HSN Code – 4802)
  • Rupee notes when sold to the Reserve Bank of India (HSN Code – 48)

Printed Books, Brochures, Newspapers

  • Cheques, lose or in book form (HSN Code – 4907)
  • Printed books, including Braille books (HSN Code – 4901)
  • Newspapers, journals and periodicals, whether or not illustrated or containing advertising material (HSN Code – 4902)
  • Children’s picture, drawing or coloring books (HSN Code – 4903)
  • Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographical plans and globes, printed (HSN Code – 4905)

Silk Worm Cocoon, Yarn, Waste & Woven Fabrics

  • Silkworm laying, cocoon (HSN Code – 5001)
  • Raw silk (HSN Code – 5002)
  • Silk waste (HSN Code – 5003)
  • Khadi fabric, sold through Khadi and Village Industries Commission(KVIC) and KVIC certified institutions/outlets (HSN Code – 50)

Wool Materials & Waste, Animal Hairs

  • Wool, not carded or combed (HSN Code – 5101)
  • Fine or coarse animal hair, not carded or combed (HSN Code – 5102)
  • Waste of wool or of fine or coarse animal hair  (HSN Code – 5103)

Cotton Materials, Synthetics & Woven Fabrics

  • Gandhi Topi (HSN Code – 52)
  • Khadi Yarn (HSN Code – 52)

Flex Raw, Vegetable Materials & Paper Yarn

  • Jute fibers, raw or processed but not spun (HSN Code – 5303)
  • Coconut, coir fiber (HSN Code – 5305)

Blankets & Bedsheets

  • Indian National Flag (HSN Code – 63)

Artificial flowers, Wigs & False Beards

  • Human hair, dressed, thinned, bleached or otherwise worked (HSN Code – 6703)

Bricks, Blocks & Ceramics

  • Idols made of clay (HSN Code – 69)
  • Earthen pot and clay lamps (HSN Code – 69)

Glasses, Mirrors, Flasks

  • Glass bangles (except those made from precious metals) (HSN Code – 7018)

Hand Tools & Cutlery

  • Agricultural implements manually operated or animal driven i.e. Hand tools, such as spades, shovels, mattocks, picks, hoes, forks and rakes; axes, bill hooks and similar hewing tools; secateurs and pruners of any kind; scythes, sickles, hay knives, hedge shears, timber wedges and other tools of a kind used in agriculture, horticulture or forestry (HSN Code – 8201)
  • Handloom (weaving machinery)

Industrial Machinery

  • Amber charkha (HSN Code – 8445)

Balloons, Parachutes & Airlift Gear

  • Spacecraft (including satellites) and suborbital and spacecraft launch vehicles (HSN Code – 8802 60 00)
  • Parts of goods of heading 8801 (HSN Code – 8803)

Medical, Chemical & Astronomy

  • Hearing aids (HSN Code – 9021)

Pencil Lighter Toiletries

  • Muddhas made of sarkanda and phool bahari jhadoo (HSN Code – 9603)
  • Slate pencils and chalk sticks (HSN Code – 9609)
  • Slates (HSN Code – 9610 00 00)

Musical Instruments

  • Indigenous handmade musical instruments (HSN Code – 92)

Machinery Lab Chemicals Drugs Medicines

  • Passenger baggage (HSN Code – 9803)

What is Form GST ANX-1 Under New GST Return?

Posted on by Tally Academy

What is FORM GST ANX-1?

FORM GST ANX-1 is an annexure to the main return GST RET-1 introduced under the new filing system of simplified returns under GST. This annexure will contain details of all outward supplies, inward supplies liable to reverse charge and import of goods and services. Details in this annexure will have to be reported invoice-wise (except for B2C supplies) based on continuous uploading facility to be made available on GST portal. The reporting can be done on a real-time basis, and will be available for the recipient of supplies to take necessary action in their FORM GST ANX-2.

What are the contents of FORM GST ANX-1?

A taxpayer needs to input the GSTIN and the basic details such as trade name, legal name, etc. will be auto-populated on the basis of the GSTIN.

Details of outward supplies, inward supplies attracting reverse charge and import of goods and services: The details will be entered as follows-

Table No. Name of the Table Instructions Notes
3A Supplies made to consumers and unregistered persons (Net of debit/credit notes) All supplies that have been made to consumers and unregistered persons (i.e. B2C) need to be reported here. The supplies need to be reported in a summary form tax rate wise and net of debit/credit notes.

HSN Codes are not required to be reported here.
3B Supplies made to registered persons (other than those attracting reverse charge) All supplies (other than those which attract reverse charge) that have been made to registered persons (i.e. B2B) need to be reported here. Reporting of supplies made to entities (including Government departments) having a TDS or TCS registration need to be also reported here.

This would also include amendments, if any.

 Only the supply of services (NOT goods) made by an SEZ to a person located in a  domestic tariff area (DTA) needs to be reported here.

The supply of goods by an SEZ to a person located in the DTA shall be reported in table 3K.

The supply of goods or services made TO an SEZ unit shall not be reported here, but reported in table 3E or 3F, as the case may be.

The ‘invoice value’ needs to be reported in column 6 and the ‘taxable value’ in column 9.

For ex: If the taxable value is Rs 200, the tax at 18% will be Rs 36, hence the total invoice value will be Rs 236.
3C & 3D Exports with/without payment of tax All exports with payment of tax (i.e. Integrated tax or IGST) need to be reported in table 3C, while exports without payment of tax need to be reported in table 3D. The shipping bill number / bill of export number that is currently available as on the date of filing of return needs to be reported against the export invoices.

The details of the remaining shipping bills can be reported after filing of the return. A separate functionality for updating details in table 3C 3D will be made available on the portal.
3E & 3F Supplies to SEZ units/developers with/without payment of tax All supplies made to SEZ units / developers with payment of tax need to be reported in table 3E, and supplies made without payment of tax need to be reported in table 3F. This includes amendments, if any. For supplies made with the payment of tax, the supplier will have an option to select if either he will claim refund on such supplies or the SEZ unit. The SEZ unit is eligible to avail input tax credit and claim a refund on unutilised credit after export, ONLY if the supplier is not availing such refund.
3G Deemed exports All supplies treated as deemed exports need to be reported here. This would include amendments, if any. The supplier has the option to declare if the refund will be claimed by him, or the recipient of deemed export supplies. If the refund is claimed by the supplier, then the recipient will not be eligible to avail input tax credit on such supplies.
3H Inward supplies attracting reverse charge (to be reported by the recipient, GSTIN wise for every supplier, net of debit/credit notes and advances paid, if any) All inward supplies which attract reverse charge need to be reported here by the recipient. The details have to be reported GSTIN-wise and not invoice-wise. Advances paid on such supplies shall be declared in the month in which the advance was paid.

The value of supplies reported shall be net of the following:

debit/credit notes, and -advances on which tax has already been paid at the time of payment of advance, if any.

If only an advance has been paid to the supplier, and no invoice or supply received, then on reporting the same, this credit shall reflect in the main return (FORM GST RET-1), but needs to be reversed in table 4 of the said return. This credit can be availed only on receipt of the supply and issue of invoice by the supplier.
3I Import of services (net of debit/ credit notes and advances paid, if any) Services which have been imported need to be reported here. The value of supplies needs to reported net of debit / credit notes, and advances paid, on which tax has already been paid at the time of payment of advance.

The amount of advance paid needs to be declared in the month in which the same was paid.

Details are not required to be reported invoice-wise in this table.

Services received from SEZ units / developers shall not be reported in this table.

If only an advance has been paid to the supplier, and no invoice or supply received, then on reporting the same, this credit shall reflect in the main return (FORM GST RET-1), but needs to be reversed in table 4 of the said return. This credit can be availed only on receipt of the supply and issue of invoice by the supplier.
3J Import of goods The details of taxes paid on the import of goods need to be reported here.

 

These goods were subjected to IGST at the time of import, and are hence not subjected to tax once again while filing this return. The amount of IGST and cess paid at the port of import needs to be reported here, in order to avail input tax credit.

 Any reversal done due to ineligibility of credit or otherwise is to be carried out in table 4B of the main return (FORM GST RET-1).
3K Import of goods from SEZ units / developers on a Bill of Entry Goods received from SEZ units / developers on a Bill of Entry need to be reported here by the recipient.

 

These goods were subjected to IGST at the time of clearance into the DTA, and are hence not subjected to tax once again while filing this return.

 The SEZ unit making such supplies should not include such outward supplies in table 3B.

The reporting in table 3J and 3K shall be required till such time the data from ICEGATE and SEZ to GSTN system starts flowing online.
3L Missing documents on which credit has been claimed in T-2 /T-1 (for quarter) tax period and supplier has not reported the same till the filing of return for the current tax period The recipient needs to provide document-wise details of the supplies for which credit has been claimed but the details of supplies are yet to be uploaded by the supplier(s) concerned as detailed below:

 

(i) Where the supplier has not reported supplies even after a lapse of two tax periods in the case of monthly return filers and after a lapse of one tax period in the case of quarterly return filers.

 

(ii) Where the supplier uploads the invoice after the recipient reports the same in this table, then such credit needs to be reversed by the recipient in table 4B(3) of the main return (FORM GST RET-1) as this credit cannot be availed twice.
4 Details of the supplies made through e-commerce operators liable to collect tax under section 52 (out of any outward supplies declared in table 3) All supplies made through e-commerce operators liable to collect tax under section 52 shall be reported here at a consolidated-level in this table even though these supplies have already been reported in table 3.

What is the format of FORM GST ANX-1?

Form GST ANX-1 Format

Important pointers taxpayers should know while filing FORM GST ANX-1?

  • The supplier can upload documents continuously and on a real time basis
  • The documents issued during a particular tax period or for any other prior period, which have been uploaded by him in the current return filing period, shall be accounted towards the tax liability of the supplier in whichever return these details have been uploaded
  • The recipient will get input tax credit during a tax period based on documents uploaded by the supplier till the 10th of the month following the month for which the return is being filed for, or the10th of the month following the quarter in case of quarterly filers
  • The details of the documents uploaded by the supplier shall be available for the recipient in FORM GST ANX-2 to take action such as to accept, reject or to keep the document pending
  • Supplies which attract reverse charge need to be reported only by the recipient and not by the supplier in this annexure
  • The place of supply (POS) has to be reported for all supplies, and this requirement is mandatory. In the case of intra-State supplies, the POS will be the State in which the supplier is registered
  • The tax rate applicable on IGST supplies can be selected from a drop-down menu. For intra-State supplies, the tax rate will be half the tax rate of Integrated tax, to be split equally between Central tax and State / UT tax. Cess should be reported under the cess column if it is applicable
  • Wherever supplies are reported net of debit/credit notes, even if the values become negative in any particular cases, the same can be reported as it is
  • All suppliers with an annual aggregate turnover over Rs 5 crores, and in relation to imports, exports, and SEZ supplies have to upload HSN-level data., whereas other taxpayers (with annual aggregate turnover up to Rs 5 crores) can report HSN codes on an optional basis in the relevant table, or leave the same blank
  • The tax amount shall be computed by the system based on the taxable value and tax rate. The tax amount so computed cannot be edited, except by issuing debit/credit notes. However, the amount under Cess will be reported by the taxpayer himself
  • Any documents rejected by the recipient shall be conveyed to the supplier only after filing of the return by the recipient
  • The new return system provides for editing or amendment of details only from the supplier’s side. The recipient can reset, unlock or reject a document, however, the option to edit or amend a document shall be made available to the supplier only
  • The rejected documents can be edited before filing any subsequent return for any month or quarter by the supplier, and the credit of the same will be available to the recipient in the next open FORM GST ANX-2. The liability for such edited documents, however, will be accounted for in the tax period in which the supplier has uploaded the documents.
  • In situations where the particulars of the document may be correct but the document has been reported in the wrong table. A facility of shifting these documents to the appropriate table will be provided in such cases so that these rejected documents can be shifted instead of needing to amend them
  • A supplier can, at any time, amend documents relating to supplies made to persons such as composition taxpayers, ISD, UIN holders etc., and the same shall not be dependent upon the action taken (accept/reject/pending) by the recipient
  • Documents belonging to the previous period prior to the current return filing system can be uploaded in the relevant tables of this annexure. Only those details can be uploaded which have not been included in the erstwhile FORM GSTR-1

Inventory Management: Importance and Benefits

Posted on by Tally Academy

Inventory is one of the most crucial aspects of any business model. A close tab on the movement of inventory can make or break your business and that’s why entrepreneurs always emphasise on effective inventory management. While a few business owners do understand the significance and cruciality of tracking inventory on a regular basis, some fail to realise its importance making their business fall through the unseen cracks.

Importance and Benefits of Inventory Management

The importance of inventory management cannot be stressed enough especially for eCommerce and online retail brands. Accurate inventory tracking allows brands to fulfil orders timely and accurately. Inventory management in businesses must grow as the company expands. With a strategic plan in place that optimizes the process of overseeing and managing inventory, including real-time data of inventory conditions and levels, companies can achieve inventory management benefits that include:

Accurate Order Fulfilment

With an effective inventory management system, you can easily track the stock in the warehouse. Bid goodbye to overstocking, stocking of obsolete items, understocking and start focusing on making your brand become one of the key players in the market space. Develop a robust plan with the help of an efficient accounting software and avoid inaccurately filled orders, high return volumes and a loss of customer base.

Better Inventory Planning and Ordering

Striking a balance between the demand and supply is extremely crucial for businesses, thus, inventory management provides aid in better planning and ordering of stock items. Imagine having a huge demand for a particular product but not having enough material to supply the same. Sounds like your worst nightmare, right? A detailed inventory management mitigates these issues, allowing warehouse managers to refresh inventory only when needed. It’s both space and cost-effective.

Increased Customer Satisfaction

Since a systematic and robust inventory tracking system will give you a comprehensive view of your stock at-hand, it yields in an increased customer satisfaction. In retail sector, customers resent late deliveries or “out of stock” notifications and eventually never return to the website to fulfil their shopping needs. However, good inventory management leads to orders being fulfilled more quickly and shipped out to customers faster. The enhanced processes can help eCommerce and online retail brands build a strong repertoire with consumers – and keep them coming back for more.

Organised Warehouse

A good inventory management strategy leads to an organized fulfilment centre. An organized warehouse results in more efficient present and future fulfilment plans. This also includes cost-savings and improved product fulfilment for businesses utilizing the warehouse for managing inventory.

Minimise the Blockage of Financial Resources

The importance of inventory control is to minimise the blockage of financial resources. It reduces the unnecessary tying up of capital in excess inventories and also improves the liquidity position of the firm. With proper inventory tracking module, business owners can take quicker decisions about the stock lying in the warehouse more wisely.